Monsoon Ltd wants to raise $10 million in a bond issue. The face value of each bond will be $100 and it will be paying an annual coupon of 7% for 5 years. The offer price set in the prospectus is $90 per bond. Issue costs are estimated at 4.5%. The company is owned by Australian resident investors and the corporate rate of tax 30%. Use the approximate cost of debt equation to determine the appropriate cost of debt for Monsoon.